Hong Kong Is Keeping Its Currency Peg Hong Kong’s central bank intervened 40 times in 2020 to keep its currency pegged to the U.S. dol lar at 7.8 Hong Kong dollars per U.S. dollar. The U.S. dollar dropped sharply in 2020, due in part to low interest rates. To date, Hong Kong’s central bank has bought 152 billion Hong Kong dollars

($19.6 billion) this year.

a. What is Hong Kong’s exchange rate policy?

b. Is the Hong Kong central bank trying to raise or lower the value of the Hong Kong dollar?
How do you know?

c. What is happening to Hong Kong’s official reserves?